Down Rounds Won't Kill You
The article argues that down rounds, while painful, are preferable to companies pursuing unrealistic growth plans or excessive cost-cutting that destroys long-term viability. CEOs should accept valuation reductions, build financial plans based on realistic data rather than returning to prior valuations, and balance growth with efficiency rather than optimizing for a single metric.
Metrics in this report
325percent
median
Private market premium over public comparables in 2021
560percent
median
Private market premium over public comparables in 2022 (widened due to public market compression)
32.4x revenue
median
2021 peak valuation for high-growth SaaS
13.7x revenue
median
2022 valuation for high-growth SaaS
105.4x ARR
median
2021 peak valuation for Series B/C SaaS
76.7x ARR
median
2022 valuation for Series B/C SaaS
60x revenue
average
2021 peak valuation
10x revenue
average
2023 valuation